Millennials: Living on the Edge of the Big City

By Tim Henderson | November 2, 2015

Cory Piirto is a newlywed living in New York City, but the prospect of starting a family is prompting her to plan a move across the Hudson River to Hoboken.

“Everything’s just easier here,” said Piirto, 27, as she lounged on the Hoboken waterfront, where Manhattan skyscrapers form a vivid backdrop. “It’s easier to live, easier to afford a two-bedroom. You can have a car and take [your children] places.”

Millennials like Piirto, the generation born after 1980 and the first to come of age in the new millennium, still love urban areas but are finding they want more space, affordability, cars and the parking spaces for them as they gain more wealth and get ready to settle down and have children.

Many millennials see close-in suburbs like Hoboken, with its youthful vibe and picture-window views of Manhattan’s skyline, as a likely compromise. The average rent for a two-bedroom apartment in Hoboken is $2,900 compared with $5,000 for nondoorman buildings in Chelsea, a neighborhood in Manhattan.

As the leading edge of the generation reaches its child-rearing age, choosing where to live is increasingly urgent. And it’s one many local governments are responding to in a desire to attract or retain the economic activity and tax dollars created by what’s now the largest generation in the U.S. workforce.

Communities are making way for more dense and affordable development, with retail stores within walking distance and public transportation, for an age group that has shunned cars out of economic necessity or preference. The payoff is great if communities can attract or retain millennials, as they tend to be highly educated and to bring about greater economic productivity, according to research published last year by the Stanford Institute for Economic Policy Research.

What Attracts Millennials?

That a close-in suburb like Hoboken can be attractive to a large number of millennials does not come as a surprise to Neil Howe, the economist and demographer who coined the term millennial.

“We have always believed that millennials are not going to stay in these core urban areas when they get married and have kids. They won’t want to bring their kids up there,” said Howe, co-author of Millennials Rising: The Next Great Generation. “But they want to be close. They want to be where the action is and they want to be with each other.”

And that can offer hope to flagging suburbs close to urban centers, Howe said. “I think you’re going to find that a big new area is going to be inner suburbs.”

According to a Rutgers University report released last year, Hoboken had a declining population for 60 years before its youthful boom started in 2000. The suburb has grown exponentially since then – partly because, as Howe said, millennials want to be with each other.

Aaron Kloke, a city planner who wrote about the sometimes conflicting priorities of millennials in Omaha for the University of Nebraska, has come to the same conclusion as Howe: Close-in suburbs can be the beneficiaries of millennials’ tastes when it comes to their choosing where they wish to live.

In his research, Kloke showed photos of neighborhoods to millennials and asked their impressions. The ones they liked most were urban and described as “dense,” “close-knit,” “lively” and “vibrant.” The least appealing were suburbs they called “uniform,” “faceless” and “cookie-cutter.”

Yet many still saw the appeal of single-family homes and abundant parking, leading Kloke to determine that some outlying city neighborhoods and close-in suburbs could be the wave of the future – places like the historic Benson area in north Omaha, the Hyde Park district in inner Austin, Texas, or the Mississippi Avenue district in north Portland.

Winners and Losers

One hope for repopulating the outer suburbs with millennials may be found in the growing popularity of the inner burbs, as millennials confront rising housing costs. As more in the age group seek to move in and their wealth increases along with their age, so do their desires for single-family homes and good schools for their children.

Consider, for example, Arlington County, Virginia. The suburb of Washington had the highest median rent of any county in the country at $1,820, according to Census estimates for 2013, the latest available.

Some close-in suburbs like Arlington are “a victim of their own success” because prices for single-family homes have skyrocketed beyond the means of the typical millennial, said Lisa Sturtevant, who wrote a 2013 study of demographic changes in the Washington area. “A single family house in Arlington is a million dollars, and they’re not building any more,” said Sturtevant.

The exurbs are responding by building more urban-looking, youth-oriented housing and retail developments with walking and public transportation in mind, she said.

This story has been reprinted from Stateline, an initiative of The Pew Charitable Trusts.

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Insurance Journal West November 2, 2015
November 2, 2015
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